Why it is Harder for Women to Be Financially Independent

PART 1: The Challenges

HisFI had it all set up. The multiple retirement accounts, the 401k, the index funds, the savings and he was even going to max them out every year while STILL living on the amount of my entire paycheck. Practicing gratitude and the law of attraction I can be pretty darn happy about this most of the time.

There is that some of the time though, where it starts to feel like I am completely and utterly behind. This combined with my money anxiety is what led me to writing this post. The fact is saving, retirement and general finances are harder on women than men. [Significantly more so if you are a woman of color]

How Women are Socialized:

Our traditional structure in society puts women at a disadvantage in many ways; and the way in which young girls are socialized is at the root of this.

In a 1997 Dreyfus Gender Investment Comparison Survey they found that “parents encourage their sons to start earning money at a far younger age (13) than girls (16-18), and twice as many boys are encouraged by their parents to save their money.” Generally, women are given very few female investment models to look up to and are not always encouraged towards careers and success in a fiscal manner.

In a study of young girls and boys in countries around the world, girls showed more math anxiety than boys, even if they were top achievers, according to research from the University of Missouri, the University of California at Irvine and the University of Glasgow. (MarketWatch)

In addition to this, women are socialized early on to not go into STEM (Science, Technology, Engineering and Math) and accounting areas of education. All of which are geared towards young men and deemed “unfeminine” choices for women. According to the Census Bureau’s American Community Survey, women comprise 48 % of the U.S. workforce but just 24 % of all workers in STEM fields. Thankfully, many initiatives have been launched to de-stigmatize STEM for women and encourage young girls to pursue these fields. (U.S. Department of Commerce)

Meaning, we have a diversity problem in the industries where women can be the most fiscally successful AND achieve a solid grounding in financial information and general math. All of these skills and confidence in such skills provide a solid footing for pursuing financial independence and early retirement.

Time to Grow Up

So if most women are socialized at a young age to fear, have anxiety or simply a general prejudice against the STEM world including math. What happens when it is time for them to grow up and start being an adult.

Turns out, a majority of women WANT to know about finances and investing! It also happens to be that they are uncomfortable with these conversations. (Ameriprise Financial)

According to the 2015 Fidelity Investments Money FIT Women Study, 80% of women confess that they have refrained from and feel uncomfortable with discussing their finances with those they are close to. Their parents, spouses, siblings, best friends, etc. (Fox News and Consumer Recovery Network)

YIKES! Do we score in any statistics???

According to Fidelity’s same study 82% of women are proficient at managing their day to day budgets. (Thank God)

Women and Retirement: Is an early one even possible?

Here is one more problem for women. Women have often been left out of the finance world because they take time off to raise a family or get married and are not the main breadwinner. If they aren’t working, their retirement accounts will reflect this. Which is a serious problem ladies, considering statistics show we live on average 10 years longer than men, especially if in a long term partnership.

Let’s say that we happen to be in that group of women who has always worked right alongside their partner. This leaves one last hot topic to touch: the wage gap. Not ALL positions have a wage gap, however this exists in many companies. In 2015, women working full time in the United States were paid 80% of what men were paid. Meaning women are at a 20% disadvantage for saving and preparing for retirement. For more on this issue check out “The Simple Truth About the Gender Pay Gap” by AAUW.

According to a January 2012 study by Ameriprise Financial, more men than women have determined how much money they’ll need to retire, have set aside money in their investments for retirement and feel confident that they’ll reach their goals. In fact, a 2010 study found that 92% of women don’t feel educated enough to reach their retirement savings goals, but that 56% of them want to be. (LearnVest )

So the whole world is against us right?

Good thing we can still do something about it.

PART 2: Beating the Odds

Let’s Get it Together:

While women may have societal structures chained to our ankles, this does not mean we can’t pull out the bolt cutters and get to work. The work will be harder and will not be fair, however, if we don’t do it, the second generation FI and young women we interact with will never have that female role model for finances.

This means a change in mindset on a personal level. Above, I stated how we socialize young girls to veer away from the “unfeminine” areas of study. Why would this be? Because women have been taught that their worth is external and sexual. If this is what brings you as a person value, your funds will go to support this. Perhaps this is the reason that only 48% of women pay off their credit cards balances. (The Simple Dollar)As a society we place a HUGE amount of weight on women’s looks and less on ability and even LESS on their thoughts or ideas. The patriarchy runs deep. Frugal Woods has an excellent article that covers this idea even more here.

Trust me, I understand the anxiety and struggle of a lower paycheck. I am an art teacher for heaven’s sake. I am not going to let this stop me from being outspoken and educated on finances….specifically my own retirement, investments, and savings. Changing my mindset to both a feminist and frugal one has been where the real work is since most of this is engrained.

Here is a short list of the things I had to work on (some I am still working on- let’s be real) in order to have control over my finances:

Eliminate any credit card debt by eliminating expenses. This means not falling into consumerism, living minimally, and cutting out those trips to the salon.

Talk about my finances with my friends or family who are doing well. My Aunt gave me some fantastic advice for retirement and finances. She is another kick ass woman who still runs independent finances from her husband.

Start a separate retirement account outside of what my work provides. If your work does not offer one, still have multiple retirement accounts.

Find amounts to save and automate them. My motto now: Pay yourself first. If I waited for what was “leftover” at the end of the month, there was nothing left over. There never is.

Be confident in what I do know and always learning! Be a life long learner.

Be ok with what I make. If I sat around all day and said “I’m not paid enough.” or “I wish I could do that, but I just don’t make enough…” (which I used to say), that is exactly what would happen. Changed my mindset. Approached what I do have with gratitude and knowledge and then see where that can get me.

Independence NOT Dependence

Since this is “His and Her FI” it is only appropriate that I touch on the relationship factor. HisFI and I keep separate bank accounts and run separate retirement/investment accounts. We split our living expenses 50/50 via PayPal while always keeping a running list on our phone for who bought what and who owes whom.

We make individual and couple goals for our funds. It is dangerous ground for one individual in the couple to try and dictate where or how money should be used. See “How NOT to tell your Spouse about FI” by HisFI. Different values are what keeps us individuals. This means we aren’t telling each other what to do or determining that one person needs to fulfill certain roles.

Whether it is travel hacking on credit cards which we do together or our individual investments we communicate and are honest about all of it. I am really thankful that HisFI has helped me and is always willing to bat around ideas.

We both look at each others accounts and know the overall numbers. It wasn’t always rainbows and butterflies. I used to be really cautious about this. I did not want anyone to know my finances or share what I had spent money on for fear of judgement or fights. (Yes I was in the 80 some percent of women who find it uncomfortable to talk about finances…but here I am blogging about it now!) I was also not making intentional choices or even watching where my money went.

While HisFI was always more open about his finances with me he was in the same boat with finance choices for some time as well. Once the secrecy was dispelled, and we weathered a few storms, honesty and openness became our policy. In the end we both needed to feel secure affording us the ability to be vulnerable without fear of any push one way or the other. HisFI and I work as an equal partnership in our finances now making us stronger as a unit. For another couple who have done it and done it well check out “Our Next Life”.

Calling all Women!!

Print by Jordan Grace Owens.

As my final close to this post, I am calling all women in the FI community to start taking action and spreading the word for other women. It is evident even in the FI world, where the top blogs and podcasts are male dominated [Shout out to Gwen on Fiery Millennials who is ranking!], that women need a larger voice out there for how to do it. I am not talking as a guest speaker to share how well you may have saved money with domestic traditionally female household duties, but how and what are you doing with your paycheck, your budget, and your investments in order to be FI and FIRE.

Perhaps more importantly, to share the trials and tribulations as a woman so that second generation FI young girls can follow in our footsteps.

Our reality for American women is that is is harder to get out of a debt spiral, contribute to retirement and savings all while planning for the future. It is a very real struggle. I want to also say that I am nowhere near knowledgeable in every way for finances. I am working on myself and therefore my finances to be able to beat the odds; control my cash flow with a plan for the future.

Have any of you experienced these struggles I talked about as a woman? Or even questions about your finances or choices that would have never been asked of a man? I look forward to hearing from all you kick ass ladies out there!

P.S. Now considering changing name to Feminist and Frugal….what would HisFI be called? Oh yes, he is a feminist too! 🙂

10 comments

I grew up in a single income family, with my father controlling the money and my stay-at-home mother having zero options except to go along with it or separate the family and go back to work after a large period with no work history and no support. Finances were only discussed in a negative way, and I constantly listened to money fights growing up. I was raised in an environment of financial fear. There wasn’t the level of information available that there is now. I felt very behind the curve, and in a small town with most families constructed in a traditional gender dynamic, I had no models to observe.

I got scholarships to pay for my undergraduate degree, and then took out loans to continue my education so I could have a better shot at a well-paying job. I had no coping skills for dealing with stress, so I overspent as a comfort. I expected to work most of my life and retire at 65.

I promised myself I would never be in a controlling situation like my mother, so my spouse and I keep separate finances even though we’ve been together for over 5 years. I have my own accounts, my own retirement savings, and we share the bills. Now that I discovered FI, I’m working on my career and my net worth and catching up on all of the learning I missed out on in my twenties. I don’t have children, but I imagine it would be even more difficult if I did! Gender definitely stunted my financial growth, no question. I’m trying not to let it hold me back.

Hello Veronika, Thank you so much for sharing your story. I relate to so many portions of those experiences, as I imagine many women do. Especially overspending for comfort. It became such a habit- something to do for myself. I look forward to seeing where your journey takes you! Thank you again for sharing. I always think it is so important women to talk to each other and hold each other up. We are in this together.

Reading this makes me so thankful that my dad talked to us about finances from an early age (and continues to do so now). Thanks to him, I don’t fall into most of those categories for women. Though I do find I don’t have any female friends to talk to in depth about budgets and finances in general. I wonder if there’s a way to get friends to be more open to talk about finances? Though I’m not certain that’s limited just to the female side of things 😉

I am so glad that you had that experience. I think removing the stigma and even the judgment that aligns with conversations on finance is a goal for opening up those conversations for both men and women.

Thank you for this post! I especially appreciate the call to action for women in the FI community! I have heard this request for women’s voices before and have also heard the request shot down (mostly by men, with responses like “all info is equal, why does it matter who’s doing the talking?”…) As a woman I think it is hugely beneficial to hear about the FI journey from a woman’s perspective! So thanks again! I am happy to have found your blog and look forward to more!

If anyone tells me women are less interested in finances, tech, whatever, I will lose my mind. You hit the nail on the head here and I love that state about parents encouraging their sons to save at an earlier age than their daughters. I’ve never heard that state before and so sad that it’s true!

Check out the case study that Mr. Money Mustache did about how easy teachers can reach FIRE. For more inspiration on how you can FIRE on a teachers salary check out this husband/wife teacher team http://www.millionaireeducator.com and their post: http://www.millionaireeducator.com/2017/02/faq-4-how-was-your-teaching-income-so-high.html Or this married teacher – teacher millionaire teacher: https://www.youtube.com/watch?v=hQDf9konzeU Teaching is a job where men and women make the same amount of money per month since they work off of one pay scale. If these folks can do it, you can too. Sounds like you are off to a good start. Just a matter of priorities, time, and amount saved. Retired FI teacher at 53, three kids, stay-at-home wife, cat, dog, travel, 403b, Roth IRA and paid off house. Teaching is an excellent job that does pay well. It’s not what you make, it’s what you save. Good Luck.

Thank you for the inspiration and articles! I have heard of both of them. Perhaps you could make this comment over on the teacher post, as it could be useful for other readers as well.

While in teaching men and women do make the same, in many other careers they do not. On district level and administration they do not. Basically anything that does not have a standardized pay scale. This post is specifically addressing the overall scheme of things in the workforce and with money for women-especially how they are socialized. As a woman who had many other jobs before being a teacher and as a teacher of Graphic Design (a area of STEM) it is a challenge.

Congratulations on your success! It sounds like you mastered the money and met some amazing goals! It is inspiring to hear your story.